As Celsius continues exploring options out of its current financial predicament, the embattled crypto lender unveiled an action plan on Monday. The firm has deepened its Chapter 11 proceedings and continues to explore options to appease investors and stabilize the business.
Reports suggest Celsius Network will deploy minted bitcoins from its mining company to improve its balance sheet while still funding mining operations.
During the latest bankruptcy hearing, the company’s lead attorney stated that Celsius Network’s mining firm currently mints about 14.2 Bitcoins daily. And with the current reality on the ground, the company is looking to increase operations so they can mine at least 10,100 bitcoins in 2022.
While this may sound like good news to investors, analysts predict that even if the firm’s mining subsidiary is able to mint 10,100 Bitcoins, at the current market value of $21,900, the minted bitcoins will only be worth $221 million, way below Celsius’s current $1.19 billion deficit. On the flip side, selling off the mining unit will also help provide the funds the company needs to offset its deficit.
Celsius also made it unequivocally clear that it is exploring third-party investment opportunities and asset sales to meet its liabilities.
A look at the company’s recent Chapter 11 bankruptcy filing shows that it has assets worth $1.43 billion. Unfortunately, most of these assets are liquid. While the company’s total liability is valued at $5.5 billion, $4.7 billion is users’ liabilities.
What is in store for investors?
The company has now presented investors with two options. Either they take a discounted cash settlement or remain long on crypto.
Celsius’s lead attorney also argued that the investors handed over their digital assets to the company for custody, calling investors unsecured creditors. Should this gain momentum, then Celsius users will have to bear the brunt of the collapse.
It is still not clear how Celsius intends to weather the storm. Even after declaring bankruptcy a week ago, there are still some grey areas to iron out. Investors will keep hoping things play out in their favor.